Softs Futures

Rubber Futures Trading Basics

Rubber futures are standardized, exchange-traded contracts in which the contract buyer agrees to take delivery, from the seller, a specific quantity of rubber (eg. 5000 kilograms) at a predetermined price on a future delivery date.

Rubber Futures Exchanges

You can trade Rubber futures at Tokyo Commodity Exchange (TOCOM).

TOCOM Rubber futures prices are quoted in yen per kilogram and are traded in lot sizes of 5000 kilograms (5 metric tons).

Rubber Futures Trading Basics

Consumers and producers of rubber can manage rubber price risk by purchasing and selling rubber futures. Rubber producers can employ a short hedge to lock in a selling price for the rubber they produce while businesses that require rubber can utilize a long hedge to secure a purchase price for the commodity they need.

Rubber futures are also traded by speculators who assume the price risk that hedgers try to avoid in return for a chance to profit from favorable rubber price movement. Speculators buy rubber futures when they believe that rubber prices will go up. Conversely, they will sell rubber futures when they think that rubber prices will fall.

How to Start Trading Rubber Futures

To buy or sell rubber futures, you need to open a trading account with a broker that handles futures trades. Most online brokerages out there only deal with stocks and stock options. Only a few such as E*TRADE Securities lets you trade futures and futures options as well.